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Government makes consumer credit orders

The Government has made two statutory instruments relating to the transfer of consumer credit (CC) regulation to FCA:

the Financial Services Act 2012 (Consumer Credit) Order 2013 transfers responsibility for CC regulation to FCA, provides for FCA to use certain of its powers in relation to CC business and makes other consequential changes to various pieces of legislation. It also ensures FCA can take appropriate action for breaches of the Consumer Credit Act 1974 (CCA) and requires it to make statements of policy relating to its new supervisory responsibilities. It took effect on 26 July for the purposes of allowing FCA to make policies and take certain actions under the CCA and will otherwise take effect on 1 April 2014; and

the Financial Services and Markets Act 2000 (FSMA) (Regulated Activities) (Amendment) (No 2) Order 2013 primarily amends the FSMA (Regulated Activities) Order (RAO) to bring a variety of consumer credit and related activities within RAO scope and regulated by FCA. The Order, which was consulted on and placed before Parliament in draft (see previous FReDs and our "Recent Publications"), brings within the RAO various activities relating to credit broking, operating electronic systems in relation to lending, activities relating to debt, regulated credit agreements, regulated consumer hire agreements and activities relating to information. It makes consequential and related changes to other pieces of secondary legislation, including those on the business test and exemptions, and makes changes to apply the appointed representative regime to CC firms. It also brings CC activities within the scope of the financial promotion regime and applies the FSMA control provisions to it proportionately. Other changes amend or revoke parts of the CCA and legislation made under it and explain what guidance FCA must give. It also sets the regime for transitional provisions and interim FCA permissions. This Order is also partly already in force for various purposes, will take effect from 2 September in respect of interim permissions, and will all take effect from 1 April 2014.